Refinance break-even calculator

When the interest you save pays back the penalty and fees, measured properly.

From your lender, or estimate the penalty; fees are typically $2,000 (our estimate).
Break-even45 monthsafter your term ends in 30 months: you could renew at the new rate then for free
Interest saved, first year
$3,318
Net by the end of your term
-$3,775
The payment-saving shortcut says
34 months
costs ÷ payment drop with a 25-year reset
Wait for renewal instead?If you break even only after your term would have ended, renewing at today's rates when the term ends costs no penalty at all. Compare staying with breaking.
Why the shortcut misleadsDividing costs by the drop in payment counts principal as a saving, and if the new loan has a longer amortization the payment falls even when you save nothing. This tool keeps the amortization the same, so only the rate differs.

Estimate, not advice. Educational estimate only, not financial, mortgage, tax or legal advice. Lenders, insurers and governments set their own rules and can change them; confirm with a licensed professional before you decide.

Break-even after 45 months; you have 30 months left on your term.

Interest saved vs what breaking costsCumulative interest saved by the lower rate, against the penalty and fees. They cross at the break-even month.$0$13K$25K$38K$50KNow2 yr4 yr6 yr8 yr10 yr
Show the numbers
Interest saved vs what breaking costs
Interest saved by yearInterest savedPenalty + fees
Now$0$12K
1 yr$3K$12K
2 yr$7K$12K
3 yr$10K$12K
4 yr$13K$12K
5 yr$16K$12K
6 yr$19K$12K
7 yr$22K$12K
8 yr$25K$12K
9 yr$28K$12K
10 yr$31K$12K
Assumptions & sources

Assumptions

  • Both loans keep the same amortization; interest saved = the difference in (payments + balance owed) month by month.
  • Semi-annual compounding (Interest Act).

Sources

  1. Financial Consumer Agency of Canada — Reduce mortgage prepayment penalties (3 months' interest or the IRD; posted-rate method; prepayment privileges; porting) (effective October 15, 2025). Checked .
  2. Financial Consumer Agency of Canada — Breaking your mortgage contract (fees, cash-back clawback, blend-and-extend) (effective October 15, 2025). Checked .
  3. Justice Laws — Interest Act, s. 6 (mortgage rates stated yearly or half-yearly, not in advance). Checked .
Want a person to check these numbers?

Get help with your numbers

Free. A person from the MITEY network team replies by email; your message doesn't go to the site you're on.

Sent to the MITEY network team at RefinanceCalculator.ca. We use it only to answer you. See the privacy notice.

Refinance break-even calculator · Powered by RefinanceCalculator.ca · MITEY